Discussion
I am facing a real life changing event in relation to work. Hoping that by sharing my troubles I might be able to get some advice.
I have been running my own small high street solicitors practise with two partners for ten years now. Due to serious issues in the way the profession is being run many, if not all, small firms are being forced to close down as they are unable to secure indemnity insurance cover. This is something that my firm is now facing and its likely that I will have to close by the end of the year. To make matters worse, any practise closing in required to pay off a sum equivalent to three times the annual indemnity insurance that they paid the year before closure. My partners and i therefore face a cost of 110,000 just to be able to close the firm down.
I am now looking at my career options. There is no way I want to continue in this profession and so am looking at other starting out in another profession/career. I obviously know that I would be entering any new profession at a junior level and the salary would be low. I intend to sell my house which has about 200k of equity to keep me going for some years until I progress up the ranks. I have a wife and child to take care of.
Any advice as to what type of career I could look into would be appreciated. I am willing to look at anything as I am a hard worker and willing to put in the hours. Another option would be to use the equity from my house sale to set up a small business. I have been looking at a dessert parlour/sports cafe type business.
I have been running my own small high street solicitors practise with two partners for ten years now. Due to serious issues in the way the profession is being run many, if not all, small firms are being forced to close down as they are unable to secure indemnity insurance cover. This is something that my firm is now facing and its likely that I will have to close by the end of the year. To make matters worse, any practise closing in required to pay off a sum equivalent to three times the annual indemnity insurance that they paid the year before closure. My partners and i therefore face a cost of 110,000 just to be able to close the firm down.
I am now looking at my career options. There is no way I want to continue in this profession and so am looking at other starting out in another profession/career. I obviously know that I would be entering any new profession at a junior level and the salary would be low. I intend to sell my house which has about 200k of equity to keep me going for some years until I progress up the ranks. I have a wife and child to take care of.
Any advice as to what type of career I could look into would be appreciated. I am willing to look at anything as I am a hard worker and willing to put in the hours. Another option would be to use the equity from my house sale to set up a small business. I have been looking at a dessert parlour/sports cafe type business.
This is certainly life changing as presented. It is also I suspect quite raw at the moment so anything you say now should be considered in that light. Options will be clearer once the scale of the issue has sunk in and the initial shock subsided. I'm suggesting therefore that it may not be best to consider options at this stage. When you are ready, it may be advisable to seek considered professional advice, both on career options and financial matters. Very good luck!
My firm has more than enough work and was it not for the insurance issue, we would certainly be looking to expand. The issue is that insurers see small firms as too risky so are just failing to provide cover. Even firms with no claims histories are being refused cover.
A merger is something I have been looking at but of course it means finding like minded people who you would want to enter into a business relationship with. To be frank, the amount of stress I have been under the last 4 to 5 years due to the whole insurance issue has really drained my love of the profession. I think maybe a fresh start in another sector may be what I need. I was looking a legal recruitment last night. From what I read former solicitors do enter this profession and do quite well. Anyone any views/experience on this?
If the firm does not pay the £100k+ runoff cover its partners will be in breach of disciplinary regulations and liable to be taken to court for the money to be recovered.
A merger is something I have been looking at but of course it means finding like minded people who you would want to enter into a business relationship with. To be frank, the amount of stress I have been under the last 4 to 5 years due to the whole insurance issue has really drained my love of the profession. I think maybe a fresh start in another sector may be what I need. I was looking a legal recruitment last night. From what I read former solicitors do enter this profession and do quite well. Anyone any views/experience on this?
If the firm does not pay the £100k+ runoff cover its partners will be in breach of disciplinary regulations and liable to be taken to court for the money to be recovered.
assadahmed said:
My firm has more than enough work and was it not for the insurance issue, we would certainly be looking to expand. The issue is that insurers see small firms as too risky so are just failing to provide cover. Even firms with no claims histories are being refused cover.
A merger is something I have been looking at but of course it means finding like minded people who you would want to enter into a business relationship with. To be frank, the amount of stress I have been under the last 4 to 5 years due to the whole insurance issue has really drained my love of the profession. I think maybe a fresh start in another sector may be what I need. I was looking a legal recruitment last night. From what I read former solicitors do enter this profession and do quite well. Anyone any views/experience on this?
If the firm does not pay the £100k+ runoff cover its partners will be in breach of disciplinary regulations and liable to be taken to court for the money to be recovered.
I may be able to assist with both the insurance and the merger discussion.A merger is something I have been looking at but of course it means finding like minded people who you would want to enter into a business relationship with. To be frank, the amount of stress I have been under the last 4 to 5 years due to the whole insurance issue has really drained my love of the profession. I think maybe a fresh start in another sector may be what I need. I was looking a legal recruitment last night. From what I read former solicitors do enter this profession and do quite well. Anyone any views/experience on this?
If the firm does not pay the £100k+ runoff cover its partners will be in breach of disciplinary regulations and liable to be taken to court for the money to be recovered.
PM if interested.
johnfm said:
Is PI unavailable or merely substantially more expensive?
The solicitor's PI market is very close to being broken. Capacity at the smaller end of the market is insufficient and it can be difficult to access what capacity there is unless you know where to look.An insurer without a security rating went bump last year which led to the SRA considering setting a minimum security rating for insurers - which on the face of it is a good thing but that means those unrated insurers in the market will no longer be able to offer insurance.
matrignano said:
No expert at all, but if you are required to take out this insurance by whatever regulator/trady body governs your business, then surely insurance companies would have the obligation to quote (although not necessarily at palatable prices)?
You would have thought that would be the case but unfortunately the regulator is so out of touch with the reality of the situation that they have let the insurance situation become totally out of control. They have no steps in place to assist any firm should they not be able to secure any cover. Its farcical really and hundreds of small firms have already left the profession over the last few years. Crafty_ said:
If the business is doing well is there a possibility of selling out to one of the larger firms to avoid the expensive winding up costs (or to cover them) ?
Even it was sold very cheaply it'd be a few quid in your pocket ?
Im afraid the big boys have no interest in the kind of work I run. Being a high street firm in Tottenham means a lot of the work I do is on legal aid. A lot of housing, family law cases. Even it was sold very cheaply it'd be a few quid in your pocket ?
assadahmed said:
Crafty_ said:
If the business is doing well is there a possibility of selling out to one of the larger firms to avoid the expensive winding up costs (or to cover them) ?
Even it was sold very cheaply it'd be a few quid in your pocket ?
Im afraid the big boys have no interest in the kind of work I run. Being a high street firm in Tottenham means a lot of the work I do is on legal aid. A lot of housing, family law cases. Even it was sold very cheaply it'd be a few quid in your pocket ?
I am surprised the SRA or Law Society have allowed things to get this bad.
AS said above, looks like an opportunity for an agile PI insurance business with VERY GOOD risk analysis...
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